Great-West Lifeco Inc. (TSX:GWO) has reported a more than one-third increase in its fourth-quarter net income, citing among other things a big after-tax gain from funds freed up from a litigation reserve.
Winnipeg-based Great-West, a subsidiary of the Power Financial Corp (TSX:PWF), said net earnings attributable to common shareholders were $624 million or 65 cents per diluted share in the three months ended Dec. 31.
That compared with $465 million or 49 cents per diluted share in the same 2010 period.
Total income in the three months ended Dec. 31 was $8 billion, up from $5.2 billion. Premium income was $4.3 billion, versus $4.6 million in the prior-year period.
For the full year, net earnings attributable to common shareholders was $2 billion or $2.11 cents per share on total income of $29.9 billion, compared with net earnings of $1.6 billion or $1.69 cents per share on total income of $30.1 billion.
During the quarter, Great-West said it reduced a litigation provision established in the third quarter of 2010, increasing after-tax net earnings of common shareholders by $223 million. The company also established a provision for $99 million after tax in respect of the settlement of a litigation relating to the company’s investment in a U.S.-based private equity firm.
The net impact was an after-tax gain of $124-million or almost 13 cents per share.
Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses.
Its consolidated net earnings include the profits of several companies including The Great-West Life Assurance Company, Canada Life Financial Corp., London Life Insurance Co. and Putnam Investments LLC.
Great-West has operations in Canada, the United States, Europe and Asia. Consolidated assets under administration as of Dec. 31 exceeded $502 billion, up $15 billion from Dec. 31, 2010.